J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

16.2 Nondeductible Taxes

Sales tax.

Sales taxes on personal property are generally not deductible. However, if Congress extends the prior law, you will be able to elect to deduct general state and local sales taxes for 2012 in lieu of state and local income taxes (16.3).

Transfer taxes.

Transfer taxes paid on the sale of securities or investment real estate are not separately deductible, but when figuring profit or loss on Form 8949, you should enter the transfer tax, along with other selling expenses, as a “negative adjustment” that decreases your gain or increases your loss; see 5.8.

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Law Alert

State and Local Sales Tax Option Needs Extension to 2012

The law authorizing the option to deduct state and local general sales taxes in lieu of state and local income taxes expired at the end of 2011. Without an extension, state and local sales taxes will not be deductible on 2012 returns. However, an extension is expected from Congress. See the e-Supplement at jklasser.com for an update.

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A transfer tax (which may be called an excise tax in some states) on the sale of a personal residence is not deductible as a real estate tax; it is imposed on the transaction and not on the value of the property. Transfer taxes are added to cost basis by the buyer or treated as an expense of sale by the seller.

Gasoline taxes.

State and local taxes on gasoline ...